DGGI Raids 30 Locations & Busts ₹3200 Crore Stock Market Scam Of 15 Listed Companies In Mumbai & Bangalore

Mumbai: The Directorate General of GST Intelligence (DGGI) conducted raids at 30 locations in Mumbai and Bangalore busting an stock market scam of nearly Rs 3,200 crs involving 15 dubious companies with no business activities while arresting two accused while the third person, who is believed to be the mastermind, is on the run.

All the companies were listed at the Bombay Stock Exchange posing as IT service providers, support services, management consultants and advertising services generating fake inward e-bills to Bengaluru for bogus supply of FMCG products like biscuits, chocolates and other items to claim Input Tax Credits (ITC).

The allegedly dubious companies after listing in the stock exchange carried circular tradings (trading within themselves) to inflate the turnover and get better bank loans and much higher share prices on stock trading.

According to DGGI preliminary probe, the arrested accused duo created bogus companies with no legitimate business operations, engaged in circular trading to inflate turnover, listed these companies on stock exchanges, and facilitated the fraudulent availing and passing of fake Input Tax Credit totaling Rs 665 crore.

“The total value of fake invoices involved in the scam amounts to over Rs 3,200 crore,” confirmed the DGGI additional director Sucheta Sreejesh adding the shell companies reported receiving Fast Moving Consumer Goods (FMCG) valued at several hundred crore and issued bogus invoices for non- existing services.

The DGGI further revealed that nine of the 15 companies busted were listed on the BSE and the promoters of these companies resorted to circular trading of fake invoices to inflate turnover, increase the share price, sell the shares subsequently and exit the company, duping common public of investments in shares of the listed bogus companies.

The taxmen have raised concerns on the alleged failure of market regulator SEBI to inspect and audit the bogus listed companies on BSE to prevent frauds.